When Comparing EOQ and JIT Inventory Systems, Which of the Following

question 8

Multiple Choice

When comparing EOQ and JIT inventory systems, which of the following statements is false?

• A) The EOQ approach takes the viewpoint that some inventory is necessary.
• B) The EOQ system assumes a constant order quantity.
• C) JIT argues that inventory investments should be minimized.
• D) The EOQ system focuses on acquisition and holding costs.
• E) JIT argues that safety stocks are necessary to reduce the probability of a stock shortage.

---

Definitions:

Present Value

A financial principle that describes the current value of a future sum of money or stream of cash flows given a specified rate of return.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Cash Flows

The movement of money into and out of a business, project, or financial product, reflecting its operational and financial health.

Simulation Models

Computational models that mimic the operations of real-world processes or systems for the purpose of analysis or decision-making.